Shareholder Alliance Secures Seunggi, Will 'Loss-Making Company' TLI Revive?

Passage of Shareholder Alliance's Proposal for Inside Director Appointment
Shareholder Alliance "To Achieve Profit Turnaround and Stock Price Increase,
We Will Prepare Measures Such as Securing Clients and Rights Offering"

[Asia Economy Reporter Minji Lee] The management rights of TLI, a semiconductor fabless company for displays listed on the KOSDAQ, have completely shifted to a shareholder coalition. At the extraordinary general meeting of shareholders held on the 7th, all internal director candidates proposed by the shareholder coalition were appointed. The coalition is determined to focus on reviving the company through a return to profitability, but since the company's founder and former CEO Kim Dalsu still holds a significant stake, the risk of a management rights dispute remains.

On the 8th, Cho Sangjun, representative of the Shareholder Coalition for Turnaround (hereafter the Shareholder Coalition) (Vice President of Strategic Planning at TLI, CEO of cell chip analysis company Cellames), said in a phone interview, "We understand that the shareholders want the company to be revived," adding, "Next year, we will definitely achieve a return to profitability so that both performance and stock price can rise."

The day before, the Shareholder Coalition for TLI's turnaround engaged in a vote battle over management rights with former CEO Kim Dalsu at the extraordinary general meeting. The total number of shares voted was 6,534,214, with a turnout rate of 88.46%. The meeting was scheduled to start at 9 a.m., but due to extended verification of proxy forms, it only began after 6 p.m. Kim Dalsu’s side put forward the appointment of Kim Dalsu and Park Woojin as internal directors as agenda items 1 and 4, while the shareholder coalition proposed Ko Youngsang and Cho Sangjun as agenda items 2 and 3. Only the coalition’s agenda items 2 and 3 passed, receiving 3,599,991 and 3,600,293 votes in favor, respectively.

Initially, a fierce vote battle was expected as both sides held nearly equal shares, but the votes of minority shareholders leaned toward the shareholder coalition. The coalition argued, "Kim Dalsu’s reckless management led to TLI’s downfall," appealing for votes. At the end of last month, they even hired a proxy voting agency to gather votes one by one. Representative Cho said, "Some shareholders came early in the morning and waited until 6 p.m. to attend the meeting," adding, "We are preparing self-help measures such as new business initiatives and a free capital increase for shareholders who earnestly wish for a return to profitability and stock price increase." TLI recorded an operating loss of 1.3 billion KRW in the first quarter, and due to a significant decrease in order volume, losses are expected to continue in the second quarter and the second half of the year.

The company will be led by current CEO Hong Se-gyeong. Cho Sangjun, the shareholder coalition representative, plans to maintain his position as vice president of strategic planning and expand new business development. Cho said, "Since former CEO Kim Dalsu stepped down from management in March, TLI has been focusing all efforts on securing clients, such as winning service contracts with major semiconductor customers," adding, "If necessary, we will also pursue capital acquisition through asset sales."

However, the risk of a management rights dispute has not completely disappeared. Although the shareholder coalition members have secured a three-year term, Kim Dalsu holds 15.8% of the shares, so the gap in shareholding between him and the coalition is not large. Cho emphasized, "There is still a risk of dispute as Kim may attempt to regain management rights through lawsuits or other means, but we will focus on saving the company."